Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83–114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading stage. Following their setup, I show that with asymmetric information at both stages, indescribability can matter.
Asymmetric information, Incentive compatibility, Incomplete contracts, Indescribability, Individual rationality
Behavioral Economics | Economic Theory
Indescribability and asymmetric information at the contracting stage. (2008). Economics Letters. 99, (2), 367-370. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/2007
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